Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 8, 1995 TAG: 9501060053
SECTION: BUSINESS PAGE: F2 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
National Association of Realtors economists believe interest rates will drop during the second quarter, said Don Constable of Moneta, president of the Roanoke Valley Association of Realtors. That would be good news because "every bump in rates takes some people out of the [housing] market," Constable said.
Despite recent increases in interest rates, he said, "8.5 to 9 percent is one heck of a lot better than three or four years ago."
If the economy stays strong - and he expects it will - Constable predicted a good year in 1995. He is with Century 21-Anchor Realtors at Smith Mountain Lake.
Last year was "pretty good," but not a banner year like 1993. Still, he said, the real-estate market was better in 1994 than at the start of the decade. At Smith Mountain Lake, he said, the market was strong because clients are not first-time home buyers, the most sensitive to interest rate increases.
"There's money out there," he said.
The only situation that can hurt this year is "a really big jump in rates" because homes still are affordable for the average family.
"Banks have programs to help" first-time buyers because they are the ones who really fuel the market, Constable said.
It is possible, he said, for a first-time home buyer to get in a house "with as little as five percent - and they'll loan you part of that." It may not be an expensive house, he said, but a first-time home buyer can own a house and start building equity.
The first-time home buyer, he said, allows the seller to move up, thus fueling the market even further.
In the commercial real-estate field, Edwin C. Hall of Hall Associates Inc. in Roanoke, reported that "1994 was a considerable improvement over the past three years."
Hall, who is president of the Virginia Association of Realtors, said he believes 1995 will be a good year although the market could slow in the second half if interest rates continue to escalate.
Enough leases on office space were written in 1994 to make it a good year, Hall said. And now demand is increasing for office space outside of downtown Roanoke. Downtown is starting to make progress, he said, but it's still the softest market, the result of at least two nearly empty buildings.
Leases on retail space "picked up considerably" so that now most of the desirable space is leased, Hall said. Space for stores is, in fact, getting tight.
The industrial space market also is doing better, Hall said.
Commercial land sales have come back significantly, so Hall is looking for a good year in this market.
Overall, he has found a lot of demand, inquiries and activity, Hall said. But if interest rates move up, he warned, the commercial real-estate market could cool in the second half of 1995.
by CNB